Lord Whitty: My Lords, I agree with many noble Lords that subsidiarity is a vital issue, but this amendment is both unnecessary in terms of achieving the modest aims which my noble friend Lord Stoddart ascribed to it, and flawed for reasons that I shall explain in a moment.

First, I must stray a little into philosophy. I suppose that I should have cottoned on at an earlier stage, but it seems that some noble Lords are under a serious misapprehension about what "subsidiarity" actually means in terms of both a general concept and what was written into the Maastricht Treaty and built into this treaty after the Edinburgh agreement.

The original concept of subsidiarity was evolved within the Catholic Church rather than in the political or legalistic arena. Whatever one's confessional allegiances, I suppose that that could be slightly alarming because the Catholic Church is a slightly centralised operation. However, in relation to the Army, to which the noble Lord, Lord Tebbit, referred, and in relation to a unitary national state, the concept of "subsidiarity" is different from when it applies to the European Union--

Lord Tebbit: My Lords, the noble Lord is, of course, absolutely right in saying that the concept of subsidiarity originated in the Holy Roman Catholic Church, but I am sure that the noble Lord will go on to agree with me that there is a greater degree of subsidiarity in the Roman Catholic Church today than in the Treaty of Rome.

Lord Whitty: My Lords, I am not going to be drawn into that one. I am saying that the Catholic Church and a unitary national state are different organisations from the European Union and that subsidiarity therefore applies differently because in those organisations power rests at the centre, at the top--that is, in the Pope or in the parliament of the national state. Almost the opposite is true in the European Union in the sense that the EU is not based on a unitary constitution; it is based on a treaty.

Therefore, the treaty defines where sovereignty lies in the sense that the powers given to European institutions are spelled out in that treaty. All other powers are presumed to rest with the member states. As the noble Lord, Lord Moynihan, implied, for the first time that presumption was written in clearly to the treaty itself thanks to the negotiating position of the previous government. That presumption was always there but it

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is not there in relation to a national state. Sovereignty rests with this Parliament and sovereignty is devolved from this Parliament to a Scottish parliament or local government. That is an entirely different concept. If I were to pursue the earlier request of the noble Lord, Lord Tebbit, and spell out precisely what issues applied at each level, I should be falling into a trap which he otherwise asks us to avoid; namely, to specify a federal constitution of the European Union. I had thought that the noble Lords, Lord Pearson and Lord Tebbit, wished to avoid that.

The concept of subsidiarity in the treaties is not a definition of different levels of competence in that sense but a test that is applied to areas of competence which are shared between the member states and the institutions of the European Union, as my noble friend Lord Grenfell indicated. I understand that the noble Lord, Lord Pearson, and other noble Lords are worried that we are pooling more and more sovereignty through these treaties. The noble Lord, Lord Tebbit, is perhaps in a slightly weaker position in that he was, after all, a member of a Cabinet which probably pooled more sovereignty than any of its successors. Nevertheless, I understand that argument. But the presumption is that, where not specified in the treaty, the member states shall have competence and where there are shared competencies the test of subsidiarity as expressed in Article 3b of the treaty applies. Therefore, subsidiarity as in the treaties is not, as suggested by the noble Lord, Lord Pearson, and others, about the repatriation of powers. They may wish that to be so but it is not and never was. It is concerned with how powers should be exercised in those areas where competence is shared between the Community and member states. I believe that it is important to be clear about the matter from the outset. I had the impression that the approach of the noble Lord, Lord Pearson, started from an entirely different point.

I turn now to the wording of the amendment. The amendment would require a report on what effectively are two alleged aspects of the new subsidiarity protocol: its application in the European Union and its application in the United Kingdom. I should like to address each in turn. I deal first with a report on the application of the protocol in the European Union. This amendment is unnecessary. As stated by the noble Baroness, Lady Williams, the noble Lord, Lord Wallace, and others, the Commission already reports to the Council on the application of the principles of subsidiarity, together with the principles of proportionality, simplification and consolidation of European law in its annual Better Law Making report. This is routinely provided for scrutiny in the parliament of each member state. In our Parliament it is provided under cover of a clear explanatory memorandum on the subject by the Government. It is considered by the scrutiny committees of this House and another place.

Lord Shore of Stepney: My Lords, I thank the noble Lord for giving way. My noble friend is really arguing that it is not necessary. I could see his arguing that case effectively in relation to reporting to the European Union. But the Commission is itself mandated under

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Clause 9 of the protocol to make an annual report, clearly because that is of great importance not only to the European Council but to the Council of the Regions and the Economic and Social Council. After all, it deals with one of the most sensitive issues of all: the distribution of powers between this country and the European institutions. If it is considered important for that purpose, how on earth can a Minister of the Crown say that it is not equally important to have an instruction laid down in the Bill itself to report to the United Kingdom Parliament in Westminster?

1.45 p.m.

Lord Whitty: My Lords, first I welcome back to this debate the noble Lord, Lord Shore of Stepney. The exchanges during the latter stages missed his sharpness of intervention. No doubt this will be the first of many such interventions today. However, I disagree with the noble Lord. I do not say that the report and its consideration by Parliament is unimportant but it does not have to be specified either in a treaty of the European Union or a Bill that ratifies a treaty of the European Union in this Parliament. The provision is already there. Not only does the report of the Commission have to be given to the institutions of the Union; it must be provided to national governments. Under our procedure that report goes from national government to both Houses of Parliament. Therefore, it is up to the Houses of Parliament to consider the report through their scrutiny committees. If required, both the scrutiny committee of this House and noble Lords can request a debate on the report. We do not need to provide for separate annual reports by the United Kingdom Government because that is provided on the basis of the Commission report in an explanatory memorandum to the scrutiny committees. I do not believe that it is necessary to specify in legislation that that is required. Noble Lords from all parties could ensure that such a debate took place. The provision for the report is already there and is prescribed under parliamentary procedures.

As to the Commission report, as my noble friend Lord Grenfell indicated, for the first time it spells out clearly that the provision of that report will be a formal and binding obligation on the Commission, as is said in paragraph 9 of the protocol. In those circumstances, I believe that a report separate from the parliamentary procedure that already exists will not add to the process.

I am not sure it was intended by the drafters of this amendment, but as written the second part of it, which is flawed in terms of this Bill, appears to relate to a report on subsidiarity within the United Kingdom. Important though that issue is, I cannot see how that is relevant to a debate on the Amsterdam protocol. The protocol is not concerned with the allocation of responsibilities within member states. Both the Labour Party and the Liberal Democrat Party, unlike the Official Opposition, have taken a strong, coherent and consistent line on subsidiarity in its general sense in the context of the programme of devolution for Scotland, Wales, local government and the English regions, including Greater London. We have a pretty active

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devolution programme. Subsidiarity is being pursued by this Government. However, that is not a matter for this Bill nor for a European treaty.

I turn to the detail of some of the speeches. It is clear that some noble Lords, like the noble Lord, Lord Pearson of Rannoch, oppose the Maastricht provisions on subsidiarity as inadequate, misplaced or misapplied in the first instance and therefore have taken a consistent approach throughout. Other noble Lords are perhaps more disappointed as to how the Maastricht and Edinburgh principles have since been applied. I understand the consistent principle that the noble Lord, Lord Pearson, has pursued. But I do not see consistency in the approach adopted by the Front Bench of the Official Opposition. As many noble Lords have indicated, it was the previous administration who signed up to many of the words repeated and elaborated upon in the protocol. The previous government were exultant in their achievements at Edinburgh and Maastricht in this respect. I do not believe that the previous government regarded the achievements on subsidiarity as inadequate; nor did they pursue a campaign for the repatriation of powers. Occasionally, they resisted the extension of powers but they did not call for their repatriation. Therefore, I do not believe that it is credible now for the Official Opposition to oppose the improved form of subsidiarity found in the protocol.

As the noble Baroness, Lady Williams of Crosby, said, there has been substantial progress in the application of subsidiarity since Maastricht. It is difficult precisely to quantify it. To some extent, as I think I said at an earlier stage, it is a dog that does not bark. If the Commission is observing subsidiarity, it does not come forward with proposals. Nevertheless as the noble Baroness said--I think that we are working to roughly the same figures--over the past three years 140 potential proposals by the Commission have been withdrawn, largely on the basis of subsidiarity. Part of that process has resulted in a reduction in the amount of primary legislation from 61 new Acts in 1990 to seven last year.

The noble Lord, Lord Monson, referred to regulations. Clearly regulations will continue to be promulgated under existing legislation, the vast majority of which was promulgated under legislation facilitated by the Single European Act, when the noble Lord, Lord Tebbit, was a member of the Cabinet. The adoption of the principles of subsidiarity at Maastricht has partly reduced dramatically the amount of primary legislation

It is a developing process. I accept that it is of course about changing the culture within the Commission. That has not changed completely, as I am sure my noble friend Lord Bruce will remind us from time to time during the rest of the debate. It is also to some extent about changing the culture of the Council. The terms of Maastricht have worked, and this protocol will strengthen and clarify that process. It will strengthen the principle of subsidiarity by incorporating in a legally binding document many of the guidelines agreed at the Edinburgh Council in 1992.

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The noble Lord, Lord Moynihan, raised the role of the ECJ. The reference to the ECJ in paragraph 2 of the protocol concerns the supremacy of Community law. Clearly in most cases subsidiarity will have been taken into account, if not by the Commission in bringing forward proposals, then by the member states in considering them in the Council. That is why I referred to the ECJ as essentially a long stop. It can arbitrate on the application of the procedures set out in the protocol as it can on all other items of the treaty, but, essentially, the political application of subsidiarity rests with the Commission and member states in the Council. As with all other disputes under the treaty, there is a long-stop provision for the ECJ.